Reductions in subsidies for solar farms could have adverse impact on landowners

By Tim Ryan

The government’s announcement in December 2013 that subsidies for solar energy are to decrease may have an impact on investment trends in the renewables market. While solar energy’s ability to generate energy security and to save costs when compared with more traditional power sources has made it an attractive form of renewable energy for investors, farmers and landowners may be concerned that the steady rental income provided by such investments may now be at risk.

In 2012, Barclays released a survey showing that one in three farmers planned on investing in renewables between 2012 and 2014. A number of these farmers were concerned about rising energy costs and wished to reduce the business costs of farming. They were also attracted by the prospect of additional income being generated by the installing of renewables: rent levels have been as high as £1,000 to £1,500 per acre, while average farming rents are around £100 to £150 per acre.

However, there is concern that the introduction of a new scheme for subsidising renewable energy will have an adverse impact on rents paid under solar agreements entered into by farmers and landowners. The scheme will cut subsidies for solar and wind energy as well as some other forms of renewable energy…

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